IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ...€¦ · Clarence, New York facility and...

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

PAR STERILE PRODUCTS, LLC and ENDO PAR INNOVATION COMPANY, LLC,

Plaintiffs,

v. ERIC HARGAN, Acting Secretary of Health and Human Services; U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES; SCOTT GOTTLIEB, Commissioner of Food and Drugs; and U.S. FOOD AND DRUG ADMINISTRATION,

Defendants.

Civil Action No.: 1:17-CV-02221 (APM)

MEMORANDUM OF ATHENEX PHARMA SOLUTIONS, LLC AND ATHENEX PHARMACEUTICAL DIVISION, LLC

IN SUPPORT OF THEIR MOTION TO INTERVENE

Case 1:17-cv-02221-APM Document 19-1 Filed 08/13/18 of 33

TABLE OF CONTENTS

I. INTRODUCTION ................................................................................................................... 1

II. SECTION 503B LEGAL FRAMEWORK.............................................................................. 2

III. STATEMENT OF FACTS .................................................................................................. 5

A. Athenex Manufactures to the Same Stringent FDA Safety Standards as Manufacturers of FDA Approved Branded Drug Products. ............................................................................ 5

B. In Reliance on FDA Guidance, Athenex Has Invested Considerable Resources Into Its 503B Compounding Business. ............................................................................................ 6

C. Athenex Designed Its Compounded Vasopressin In Ready-to-Use Form, which Is a Faster and Safer Form than Vasostrict®. ...................................................................................... 7

D. Athenex Applies its cGMP Compliant Manufacturing Process to Every Batch of Compounded Drug Product. ............................................................................................. 13

E. Athenex’s Bulk-Compounded Vasopressin is Safer than Compounding Sterile-to-Sterile............................................................................................................................................ 14

IV. ARGUMENT ..................................................................................................................... 16

A. Athenex is Entitled to Intervene as of Right. ..................................................................... 16

1. Athenex Has Article III Standing to Intervene as a Defendant. ..................................... 17

2. Athenex Has a Significant Protectable Interest in Upholding the FDA Guidance and Vasopressin’s Inclusion in the Category 1 List. ............................................................ 19

3. The Disposition of this Action May Impair or Impede Athenex’s Ability to Protect its Interest............................................................................................................................ 22

4. Athenex’s Interests Are Not Adequately Represented by the Existing Parties. ............. 23

5. Athenex’s Motion is Timely. ......................................................................................... 25

B. Athenex May Intervene Permissively. ............................................................................... 26

V. CONCLUSION ..................................................................................................................... 27


TABLE OF AUTHORITIES

Page(s)

Cases

Am. Horse Protection Assoc., Inc. v. Veneman, 200 F.R.D. 153 (D.D.C. 2001) .....................................................................................17, 22, 24

Assoc. Dog Clubs of N.Y. State v. Vilsack, 44 F. Supp. 3d 1 (D.D.C. 2014) ....................................................................................... passim

Bennet v. Spear, 520 U.S. 154 (1987) .................................................................................................................18

Fund For Animals, Inc. v. Norton, 322 F.3d 728 (D.C. Cir. 2003) ......................................................................................... passim

Hardin v. Jackson, 600 F. Supp. 2d 13 (D.D.C. 2009) ...............................................................................23, 24, 26

Heckler v. Cheney, 470 U.S. 821 (1985) .................................................................................................................18

Military Toxics Project v. EPA, 146 F.3d 948 (D.C. Cir. 1998) .................................................................................................19

Mova Pharm. Corp. v. Shalala, 140 F.3d 1060 (D.C. Cir. 1998) ...................................................................................16, 21, 22

Roane v. Leonhart, 741 F.3d 147 (D.C. Cir. 2014) .....................................................................................23, 25, 26

Roeder v. Islamic Republic of Iran, 333 F.3d 228 (D.C. Cir. 2003) .................................................................................................20

U.S. v. Morten, No. 09-1018, 2010 WL 3069060 (D.D.C. Aug. 4, 2010) ........................................................19

Wildearth Guardians v. Salazar, 272 F.R.D. 4 (D.D.C. 2010) ...................................................................................19, 20, 22, 23

Statutes

5 U.S.C. § 701 (a)(2) ......................................................................................................................18

21 U.S.C. § 353b(a) (2012) ......................................................................................................1, 2, 3

Administrative Procedure Act, 5 U.S.C. § 704 ..............................................................................18


ii

Drug Quality and Security Act, Pub. L. 113-54, 127 Stat. 587 (2013)............................................2

FDCA Section 501(a)(2)(B) .................................................................................................. passim

Federal Food, Drug and Cosmetic Act Section 503B ............................................................ passim

Rules

42 C.F.R. § 482.25 .........................................................................................................................13

Fed. R. Civ. P. 24(a)(2) .......................................................................................................... passim

Other Authorities

21 C.F.R. Parts 210 and 211 ............................................................................................................5

159 Cong. Rec. S8071-04 (daily ed. Nov. 18, 2013) .......................................................................3

Category 1 – Bulk Drug Substances Under Evaluation (July 2017), available at https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Pharmacy Compounding/UCM467374.pdf (last visited July 24, 2018) .......................4


I. INTRODUCTION

Pursuant to Rule 24 of the Federal Rules of Civil Procedure, Athenex Pharma Solutions,

LLC and Athenex Pharmaceutical Division, LLC (collectively, “Athenex”) move to intervene as

defendants in the above-captioned matter on the grounds that they meet the requirements for both

intervention as of right and permissive intervention. By their complaint, Plaintiffs Par Sterile

Products, LLC and Endo Par Innovation Company, LLC. (“Par” or “Plaintiff”) seek undeserving

declaratory and injunctive relief that: (i) vasopressin be delisted from Category 1 of the U.S.

Food and Drug Administration’s (“FDA”) list of bulk drug substances under evaluation pursuant

to Section 503B of the Federal Food, Drug and Cosmetic Act (“FDCA”) (“Category 1 List”); (ii)

the FDA’s January 2017 Interim Policy on Compounding Using Bulk Drug Substances Under

Section 503B of the Federal Food, Drug, and Cosmetic Act (“2017 Guidance”), which lawfully

applies FDA’s enforcement discretion to Category 1 substances, be enjoined; and (iii) that the

FDA be enjoined from authorizing the compounding of vasopressin under Section 503B of the

FDCA.

Vasopressin, a life-saving drug that increases blood pressure in adults with vasodilatory

shock in emergency scenarios, is included on FDA’s Category 1 List. Athenex has a substantial

interest in this litigation because it produces and sells to health care providers a drug product

produced by compounding1 vasopressin in accordance with Section 503B of the FDCA.

Athenex has conducted extensive research in developing its compounded vasopressin products

and spent considerable efforts and financial resources to develop its 503B facilities and

operation. Athenex started selling its vasopressin compounded products on August 13, 2018.

1 Section 503B of the FDCA defines “compounding” to mean “combining, admixing, mixing, diluting, pooling, reconstituting, or otherwise altering of a drug or bulk drug substance to create a drug.” 21 U.S.C. § 353b(d)(1).


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The disposition of this case may impair Athenex’s ability to protect its continued

compounding of bulk vasopressin and its sale of vasopressin products because Athenex would be

forced to cease compounding and selling them if Plaintiff succeeds in this litigation. Such a

result would deprive Athenex of millions of dollars in lost profits and waste the research and

development costs already sunk into its 503B operation. It would also cripple Athenex’s existing

Clarence, New York facility and its in-progress development of a new Dunkirk, New York

facility. The Dunkirk facility will provide hundreds of jobs as part of the “Buffalo Billion,” a

New York state government project that aims to invest $1 billion in the Buffalo-area economy.

Furthermore, Athenex has standing as a defendant, none of the parties adequately

represent Athenex’s interests, and its motion is timely because no party has filed a dispositive

motion on the merits. For these reasons and as more fully set forth below, Athenex’s motion to

intervene as of right as a defendant should be granted. In the alternative, Athenex also meets the

test for permissive intervention under Rule 24(b).

II. SECTION 503B LEGAL FRAMEWORK

In 2013, Congress enacted the Drug Quality and Security Act (“DQSA”), amending the

FDCA to add, inter alia, the Compounding Quality Act, which is commonly referred to as

Section 503B. See Drug Quality and Security Act, Pub. L. 113-54, 127 Stat. 587 (2013).

Section 503B describes the conditions that must be satisfied for human drugs compounded by an

“outsourcing facility”2 to be exempt from Section 505 and other sections of the FDCA that relate

to the approval of new drug applications. 21 U.S.C. § 353b(a) (2012). Section 503B was

designed to recognize two equally important objectives. First, Congress recognized the

2 Section 503B defines “outsourcing facility” to mean a facility that is engaged in the compounding of sterile drugs, has registered with FDA as an “outsourcing facility,” and complies with all of the requirements of Section 503B. 21 U.S.C. § 353b(d)(4)(A).


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importance of drug compounders in our health care system. See, e.g., 159 Cong. Rec. S8071-04

(daily ed. Nov. 18, 2013) (statement of Sen. Boozman) (“Without compounders, doctors would

not perform surgeries. Without compounders, oncologists would be forced to administer

alternative chemotherapy drugs. Without compounders, patients would suffer from limited

access. These are real issues and real problems… .”). Second, Congress also recognized the

need for and importance of stringent safety requirements that “outsourcing” facilities must

follow. Id. (statement of Sen. Warner) (“The [Compounding Quality Act]… ensures that

patients and providers have access to safe compounded drugs.”). Accordingly, Section 503B

creates comprehensive requirements for regulated “outsourcing facilities,” including registration,

labeling, rigorous controls and quality standards, adverse incident reporting, and FDA

inspections. See 21 U.S.C. § 353b(b) (setting forth requirements for registration of outsourcing

facilities and reporting of drugs).

Congress also provided that “outsourcing facilities” could compound using “bulk drug

substances” only if those bulk drug substances “appear on a list established by the Secretary

identifying bulk drug substances for which there is a clinical need through notice and comment

procedures (the “Clinical Need List”). Id. § 353b(a)(2).3 In the interim, while FDA works

through the process of establishing the Clinical Need List, FDA published the 2017 Guidance to

articulate its enforcement discretion in a way that “avoid[ed] unnecessary disruption to patient

treatment.” 2017 Guidance at 7. The 2017 Guidance states that “FDA does not intend to take

action against an outsourcing facility for compounding a drug product using a bulk drug

3 Section 503B(a)(2) requires that in setting the list of bulk drug substances, FDA (i) publis[h] a notice in the Federal Register proposing bulk drug substances… including a rationale for such proposal; (ii) provid[e] a period of not less than 60 calendar days for comment on the notice; and (iii) publis[h] a notice in the Federal Register designating bulk drug substances for inclusion on the list. 21 U.S.C. § 353b(a)(2).


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substance that does not appear on the 503B bulks list [(i.e., the Clinical Need List)],” providing

that certain conditions are met. Id. at 8. Those conditions are: (i) the bulk substance appears on

the 503B Category 1 List on FDA’s website4; (ii) the manufacturer has registered with FDA as

an outsourcing facility; (iii) the bulk substance is accompanied by a valid Certificate of Analysis;

(iv) the bulk substance complies with any applicable USP or NF monograph; and (v) the drug

product is compounded in compliance with all other provisions of section 503B, including

FDA’s Current Good Manufacturing Practices (“cGMP”) under Section 501(a)(2)(B) of the

FDCA. Id.

Plaintiff brought this lawsuit against the FDA, Scott Gottlieb, U.S. Health and Human

Services, and Eric Hargan (collectively, “Federal Defendants”), seeking: (1) a declaration that

the 2017 Guidance is “contrary to law,” (2) vacatur of the FDA’s “listing of vasopressin in

Category 1,” and (3) an injunction prohibiting FDA from “authorizing bulk drug compounding

using vasopressin” without first complying with the notice and comment procedures. See

10/26/17 Compl., ECF No. 1, at 34-35.

4 The January 2017 Guidance sets forth three categories: 503B Category 1 – Substances Nominated for the Bulks List Currently Under Evaluation; 503B Category 2 – Substances Nominated for the Bulks List That Raise Significant Safety Risks; and 503B Category 3 – Substances Nominated for the Bulks List Without Adequate Support. See 2017 Guidance at 5-6.

Vasopressin is listed as a Category 1 Substance, even after the FDA removed certain other drugs from the Category 1 List on July 23, 2018. See FDA, Bulk Drug Substances Nominated for Use in Compounding Under Section 503B of the Federal Food, Drug, and Cosmetic Act, 503B Category 1 – Bulk Drug Substances Under Evaluation (July 2017), available at https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Pharmacy Compounding/UCM467374.pdf (last visited July 24, 2018).


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III. STATEMENT OF FACTS

A. Athenex Manufactures to the Same Stringent FDA Safety Standards as Manufacturers of FDA Approved Branded Drug Products.

Athenex, Inc.5 is a global pharmaceutical company headquartered in Buffalo, New York.

See Declaration of Joseph Mase (“Mase Decl.”) ¶ 2. Its mission is to improve the lives of

patients by creating more effective, safer and tolerable treatments. Id. In 2014, Athenex (a

subsidiary of Athenex, Inc.) was formed when Athenex, Inc. acquired QuaDPharma, Inc.

(“QuaDPharma”), who operated a Clarence, New York laboratory and manufacturing facility

that produced and tested small-batch, FDA-approved, pharmaceuticals for drug companies and

researchers. See Declaration of Robert Keem (“Keem Decl.”) at ¶ 2. Athenex, Inc. acquired

QuaDPharma and changed its name to Athenex Pharma Solutions, LLC. Id.

Because of its roots in manufacturing FDA-branded drugs, Athenex’s Clarence facility is

perfectly suited for manufacturing compounded drug products from bulk drug substances. Mase

Decl. ¶ 5. The facility operates in accordance with the FDA’s stringent cGMP manufacturing

regulations, Keem Decl. ¶ 3, which set a high bar to meet and require painstaking attention to

detail. See 21 C.F.R. Parts 210 and 211 (setting out cGMP requirements). cGMP is the same

standard by which FDA-branded drugs, like Plaintiff’s Vasostrict®, are produced. Id. ¶ 3.

Given its cGMP-compliant facility, and extensive history manufacturing FDA-branded

drugs, Athenex was a natural fit for 503B compounding. Mase Decl. ¶ 5. Unlike most other

503B compounders, Athenex already had more than seven years of experience producing FDA

branded drugs under the FDA’s stringent cGMP requirements. See Keem Decl. ¶ 4. On April

5 Athenex, Inc. was formed under the name Kinex Pharmaceuticals LLC in November 2003. Mase Decl. ¶ 3. It was incorporated in the State of Delaware under the name Kinex Pharmaceuticals, Inc. on December 31, 2012 and changed its name to Athenex, Inc. on August 26, 2015. Id.


6

10, 2017, Athenex registered with the FDA as a 503B facility, id. ¶ 5, launching its bulk

compounding operation with the same attention to detail and safety standards as a facility

manufacturing FDA-branded drugs. Athenex meets all criteria for 503B compounding set forth

in the Guidance. Mase Decl. ¶ 7. Athenex is one of only about 75 registered 503B facilities

nationwide. Athenex’s manufacturing process has been inspected and approved by the FDA,

most recently on December 2017.6 Keem Decl. ¶ 5.

B. In Reliance on FDA Guidance, Athenex Has Invested Considerable Resources Into Its 503B Compounding Business.

After FDA published its 2017 Guidance, Athenex fully committed to operating a 503B

compounding business. Mase Decl. ¶¶ 7-8. Athenex made significant investments in—and built

its long-term business plan around—large scale 503B manufacturing, in reliance on FDA’s

articulation of how it would exercise its enforcement discretion during the period leading up to

its forthcoming bulk drug substance rulemakings. Mase Decl. ¶ 8-9.

Athenex has invested more than $2 million renovating the Clarence facility’s aseptic

operations space. Mase Decl. ¶ 8. Additional improvements are already underway, including

work to expand the space by an additional 8,000 square feet. Id. The facility currently employs

approximately fifty workers, including two registered pharmacists, a manufacturing engineering

group of six, a quality control group of thirteen, a manufacturing group of ten, a quality

assurance group of six, a supply chain group that includes five, a facility group of three, and a

research and development group of three. Keem Decl. ¶ 5. The facility will accommodate more

6 Athenex, Inc. is also cGMP-compliant. Keem Decl. ¶ 4. The Athenex family of companies for years has been manufacturing branded drug products and active pharmaceutical ingredients (“API”) used by other pharmaceutical companies. Keem Decl. ¶ 4. All of the manufacturing completed by the Athenex, Inc. family of companies is cGMP-compliant and FDA-inspected, including its plant in Chongqing, China, where it manufactures active pharmaceutical ingredients. Keem Decl. ¶ 4.


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staff as its operation grows. Keem Decl. ¶ 5. Athenex invested millions of dollars outfitting

laboratory space in Buffalo to use for its 503B operations. Mase Decl. ¶ 8. And, Athenex’s

marketing and commercialization team invested significant time researching the viability of

vasopressin as a compounded product, including the market need for a ready-to-use product,

market research on product needs, and labeling and packaging development procedures. Mase

Decl. ¶ 8. Approximately six key members of that team worked on the development and launch

of vasopressin for the last year. Id.

Expanding on its current 503B Clarence operation, Athenex is building a second facility

in Dunkirk, New York for large scale 503B compounding and other cGMP-compliant drug

manufacturing. Mase Decl. ¶ 9. The $209 million Dunkirk facility will span approximately

320,000 square feet and will employ approximately 450 staff; the facility’s concrete foundation

has been laid and Athenex has begun ordering equipment for its 503B compounding operations.

Id. The Dunkirk facility is funded by a $225 million grant from the State of New York, as part

of Governor Cuomo’s “Buffalo Billion” initiative to revitalize the Buffalo economy, and in line

with New York State’s initiatives for Western New York to become a leading hub for health and

life sciences innovation and commercialization. Id. In return, Athenex committed to provide

hundreds of jobs in Dunkirk and Buffalo over the next ten years. Id. Within five years of

operations at the Dunkirk facility, Athenex intends to employ 450 employees at the Dunkirk

facility, with approximately 80 percent of the Dunkirk workforce focusing on 503B

compounding from bulk drug substances. Id.

C. Athenex Designed its Compounded Vasopressin in Ready-to-Use Form, which is a Faster and Safer Form than Vasostrict®.

Relying on FDA’s inclusion of vasopressin as a 503B Category 1 substance, Athenex

selected vasopressin as one of its first bulk compounded products. Mase Decl. ¶ 15. Intravenous


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vasopressin is a polypeptide hormone that causes contraction of vascular and other smooth

muscles; it is used to increase blood pressure in adults with vasodilatory shock (e.g., post-

cardiotomy or sepsis) who remain hypotensive, despite fluids and catecholamines. Mase Decl.

¶ 10. Vasopressin is used mostly in emergency scenarios, like when a patient goes into cardiac

arrest during surgery. Id.

Medical professionals have used intravenous vasopressin for this purpose for almost 100

years. See Declaration of Bridget S. McCabe (“McCabe Decl.”), Ex. 1, Aaron Hakim, Ravi

Gupa & Joseph S. Ross, High Costs of FDA Approval for Formerly Unapproved Marketed

Drugs, 318 Journal of American Medical Association 2181, at 2181 (2017) (hereinafter

“JAMA”). In November of 2014, Par received FDA approval for its version of vasopressin

(Vasostrict®),7 Compl. ¶ 52, and on December 15, 2014, FDA instructed all other suppliers of

unapproved intravenous vasopressin to stop manufacturing their products by January 30, 2015,

leaving only Par with an FDA-approved product, JAMA at 2181. During this time, Par

leveraged its exclusivity to maximize sales. The average wholesale price of intravenous

vasopressin surged from $4.27 to $138.40 per vial in November 2016—an increase of 3141%.

JAMA 2181. In 2013, when there were multiple competing suppliers, total sales from

intravenous vasopressin approximated $4 million. Id. As of November 2016, annualized sales

7 Prior to the 1938 FDCA, thousands of drug products were on the market without FDA approval. JAMA 2181. In 2006, as part of the FDA’s Unapproved Drugs Initiative, the FDA permitted companies to obtain FDA approval to market a drug already on the market through an abbreviated process that would not cause undue burden on consumers already using the drug. Id. Although Plaintiff’s complaint refers to “painstaking efforts” to obtain FDA approval, Compl ¶ 2, its application for Vasostrict® to the FDA relied only upon a review of then published literature to characterize the pharmacology, safety, and efficacy of its drug, JAMA 2181. No new nonclinical pharmacology, toxicology or human studies supported the regulatory approval. JAMA 2181.


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of Vasostrict® totaled nearly $400 million.8 Id.

Par’s Vasostrict® Is Not Ready-to-Use. Vasostrict® is not produced in ready-to-use

form and has a short shelf life. Mase Decl. ¶ 11. The health care provider must manipulate

Vasostrict® into a saline or dextrose solution just before administering it to a patient;9 once the

product is readied, it must be discarded after 18 hours at room temperature (or 24 hours if the

product was refrigerated), Compl. ¶ 53. The unavailability of a ready-to-use form of the drug

has two primary shortcomings: (1) it takes precious time to prepare the drug for administration in

emergency situations, see Mase Decl. ¶ 11; and (2) it presents a higher risk of human error or

contamination when medical professionals admix vasopressin hurriedly and outside of an aseptic

environment (e.g., without a laminar flow hood), see id.

For example, if the Vasostrict® is not in a cart in the medical unit it must be ordered

from the pharmacy during the middle of a procedure, which can take 15 minutes or longer, if

nothing goes wrong, where it will have to be mixed, and brought to the patient. Mase Decl. ¶ 12.

Even if the Vasostrict® is stored in a cart in the medical unit, the multi-step process of mixing

the right dosage is performed by the nurse or medical professional on the spot, outside of a sterile

environment, and not under an aseptic hood. Id. To administer Vasostrict®, the following

aseptic admixture steps are generally required:

1) Wash hands, remove any jewelry, put on gloves;

2) Gather all necessary materials for preparing the IV, making sure they are not expired, are free from particulate matter, and not leaking;

3) Select the correct number of Vasostrict® vials needed for the proper dosage (this frequently requires the nurse or medical professional to correctly measure part of a

8 “As a result of the high cost, reports have surfaced of [Vasostrict®] being removed from code carts, making it unavailable in life-threatening situations.” JAMA 2181. 9 See McCabe Decl., Ex. 6, Vasostrict® Sell Sheet (product label), available at http://www.parsterileproducts.com/products/assets/pdf/PI/2017/Vasostrict-1mL-10mL-3003619D.pdf (last visited on August 12, 2018).


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vial (e.g., to measure out two and a half vials)—a step that adds time and potential for error);

4) Select the smallest gauge needle suited for the task and attach the needle to the syringe;

5) Clean the top of the vial with alcohol;

6) Inject an equal amount of air into the vial with the syringe and needle, before withdrawing the medication;

7) Draw into the syringe the proper amount of Vasostrict®, measuring and using partial doses if needed;

8) Remove the needle, activate the needle’s safety device and dispose of needle;

9) Attach new needle;

10) Verify which IV bag diluent must be used and what volume should be added to make a sterile solution, then select the correct diluent;

11) Clean the insertion port of the IV bag with alcohol;

12) Input needle into IV bag insertion port and inject the Vasostrict® to mix with the diluent in the bag;

13) Inspect the product for particulate matter and discoloration prior to administration;

14) Create a label for the IV admixture, which includes the patient’s name and identifying information, drug name and strength, infusion period, flow rate, expiration date and time (often in emergent situations, labeling is not available, which can lead to medication errors);

15) Insert IV tubing spike into bag; and

16) Hang the bag for intravenous delivery to the patient.

Mase Decl. ¶ 12. This process might take approximately 5-7 minutes in a best-case scenario, if

nothing goes wrong. Id. If multiple vials are needed to make the right dose for a patient, some

of these steps must be repeated. Id.

There is potential for devastating human error at every step in this process. Mase Decl. ¶

13. For example, if the patient is given the wrong dose of Vasostrict®, serious medical


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complications could arise that may lead to death. Id. If the aseptic steps are not performed or

are ineffective, the patient could have contaminated product injected into his or her bloodstream,

which can lead to life-threatening infections. Id. As Plaintiff admits, “vasopressin products are

associated with an array of potential adverse reactions including hemorrhagic shock, heart

failure, and acute renal insufficiency.” Compl. ¶ 53. “[T]he improper storage, preparation, or

administration of vasopressin products may also have significant adverse consequences.” Id.

The availability of a clearly labeled, ready-to-use form of vasopressin addresses the risks that are

otherwise presented by having someone who is not a pharmacist prepare the patient’s

Vasostrict® mixture in an unlabeled bag while the medical emergency is unfolding. Mase Decl.

¶ 12, 17.

Athenex’s vasopressin products are faster and safer. Recognizing these shortcomings

and after extensive market research, Athenex relied on the 2017 Guidance and worked to

develop a ready-to-use form of vasopressin. Mase Decl. ¶¶ 14-15. Athenex’s compounded

vasopressin products are supplied in IV bags that do not require dilution or refrigeration and

have a shelf life of 60 days. Id. ¶ 16. Athenex launched its vasopressin products on August 13,

2018, Mase Decl. ¶ 18; it currently supplies the products in 50 unit per 50 ML saline and 100

unit per 100 ML saline concentrations, id. ¶ 16.

Athenex’s vasopressin products are faster to administer, not requiring any further dilution

or mixing, because they are in ready-to-use form. Mase Decl. ¶ 17. Administering them to a

patient also carries less risk of human error because, unlike the complex, multi-step process for

Vasostrict®, Athenex’s products can be administered to patients by simply selecting the proper

dosage (by referencing the easy-to-read label that is applied on every bag during the

manufacturing process) and connecting the bag to the patient’s IV line. Id. Having a ready-to-


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use product is especially important in emergency cardiac events, where minutes matter. Id.

These clinically important benefits were unavailable to patients and health practitioners when

Vasostrict® was the only vasopressin product available.

Such clinical benefits enjoy a strong consensus in the medical community and

government agencies alike. A highly-regarded health care accreditation organization called the

Joint Commission10 maintains two hospital accreditation standards that emphasize the

importance of ready-to-use for medication management in the hospital setting. The standard

titled “The hospital safely manages emergency medications” (MM.03.01.03) requires that

“[e]mergency medications and their associated supplies are readily accessible in patient care

areas” and “[w]henever possible, emergency medications are available in unit-dose, age-specific,

and ready-to-administer forms.” See McCabe Decl., Ex. 2, Joint Commission Standard

MM.03.01.03. Similarly, the standard titled “The hospital safely dispenses medications”

(MM.05.01.11) requires that “[m]edications are dispensed in the most ready-to-administer forms

commercially available and, if feasible, in unit doses that have been repackaged by the pharmacy

or licensed repackager.” See McCabe Decl., Ex. 3, Joint Commission Standard MM.05.01.11.

The Centers for Medicare & Medicaid Services (“CMS”), part of Defendant U.S. Health

and Human Services, provides in its State Operations Manual that “[w]henever possible,

medications are dispensed in the most ready to administer form available from the manufacturer

or, if feasible, in unit dose that have been repackaged by the pharmacy.” McCabe Decl., Ex. 4,

10The Joint Commission is an independent, not-for-profit, health-care-accreditation organization, formerly known as the Joint Commission on Accreditation of Healthcare Organizations. See https://www.jointcommission.org/about_us/about_the_joint_commission_main.aspx (last visited on Aug. 12, 2018). “Joint Commission accreditation and certification is recognized nationwide as a symbol of quality that reflects an organization’s commitment to meeting certain performance standards.” Id.


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Excerpt of CMS, State Operations Manual, Appendix A - Survey Protocol, Regulations and

Interpretive Guidelines for Hospitals (“CMS Manual”) at 312. The CMS Manual interprets 42

C.F.R. § 482.25, which is the federal regulation requiring hospitals to “have pharmaceutical

services that meet the needs of the patients.” 42 C.F.R. § 482.25.

In addition to timeliness, ready-to-use drugs like Athenex’s vasopressin products are also

clinically important because they decrease the risk of human error in administration. Mase Decl.

17. With a ready-to-use drug, the health care provider knows it has already been mixed properly,

so the indicated dose is accurate. The clear labeling on a pre-packaged, ready-to-use drug

ensures the right drug is administered in the intended dose. Mase Decl. ¶ 17.

D. Athenex Applies its cGMP-Compliant Manufacturing Process to Every Batch of Compounded Drug Product.

The Athenex manufacturing process—applied to every batch of compounded drug

product—comports with the same strict manufacturing process standards that govern FDA-

approved, branded drug products. Keem Decl. ¶¶ 8-9.

Athenex’s cGMP-compliant process of producing its compounded vasopressin products

can be broadly described in five steps:

1) Athenex acquires all the materials needed to compound its vasopressin products

from qualified sources, which it vets according to standard operating procedures,

including ensuring that the supplier for the API (i.e., bulk substance) is one approved

by the FDA and recently audited to cGMP standards by the Athenex quality group.

The materials needed to compound vasopressin include bulk drug substance

(vasopressin), excipients, water for injection, formulation pH adjusters, and the

intravenous (“IV”) bags.

2) Although the bulk drug substance is one approved by the FDA, Athenex also


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conducts its own testing of critical parameters (e.g., potency) using industry-

recognized standards, which are outlined in its standard operating procedures.

3) Athenex formulates the vasopressin from bulk and aseptically processes the material

using validated methods, which includes a media fill validation using industry-

recognized standards. The formulated product is then transferred to our aseptic suite

(i.e., a “clean room”) for further manufacturing.

4) Athenex fills the IV bags with the vasopressin substance in a clean room under ISO5

hoods using a standardized, automated process to ensure all bags are filled with the

correct quantities. Athenex weighs each bag before and after filling to verify the

amount delivered matches the batch record.

5) Athenex then rigorously inspects, labels, and packages the bags for delivery, testing

and issuing a Certificate of Analysis for every batch it produces, to demonstrate the

products are uniformly within prescribed quality, testing, and safety parameters.

Keem Decl. ¶ 8. At each step along the way, trained professionals check and double-check the

processes described above. Id. Athenex also conducts destructive testing to demonstrate the

absence of contamination in a microbiology suite, where gowned personnel use specially-

designed techniques to confirm sterility. Id. ¶ 9. These rigorous manufacturing standards, which

meet cGMP requirements—the same standard applied to the manufacture of branded

pharmaceuticals—are followed every time Athenex produces a batch of compounded

vasopressin. Keem Decl. ¶ 9.

E. Athenex’s Bulk-Compounded Vasopressin is Safer than Compounding Sterile-to-Sterile.

Compounding from bulk drug substances with a process like the one Athenex uses is

safer than traditional sterile-to-sterile compounding starting from a finished drug product. The


15

Institute for Safe Medication Practice (“ISMP”), an independent, nonprofit organization focused

on the safe use of medications and the prevention of medical errors with over 35 years of

experience, recommends using a compounded, premixed product over a substance manually

compounded.11 It states that, “[t]o the maximum extent possible, COMMERCIALLY-

PREPARED, premixed parenteral products and unit dose syringes are used versus manually

compounded sterile products.”12 The term “commercially-prepared” means a “product available

from either a commercial manufacturer or compounding facility.”13

There are many ways in which compounding from bulk under Section 503B is safer than

compounding from sterile-to-sterile.14 For example, there is risk of contamination when bringing

vials of an FDA-branded starting drug (like Vasostrict® for example) into an aseptic

manufacturing suite for compounding because although the drug inside the vial is sterile, the

outside is not and thus, each vial must be wiped down. Keem Decl. ¶¶ 11-12. These risks do not

apply to bulk compounding, like with Athenex’s process, because each bulk substance is

processed into a sterile environment before coming into the clean room for processing. Id. ¶ 12.

The chance for human error is also reduced when compounding from bulk drug substances

because there are fewer manipulations in the manufacturing process. Id. By validating and

automating the process, Athenex has reduced the risks of error. Id.

11 Plaintiff also relies on the ISMP as an authority on medical safety. See Compl. ¶ 53. 12 See McCabe Decl., Ex. 5, ISMP Guidelines for Safe Preparation of Compounded Sterile Preparations, Revised 2016, available at https://www.ismp.org/sites/default/files/attachments/2017-11/Guidelines%20for%20Safe% 20Preparation%20of%20Compounded%20Sterile%20Preperations_%20revised%202016.pdf (“ISMP Report”) (last visited August 12, 2018), at 8. 13 Id. at 16. 14 The FDCA also authorizes compounding drugs by starting with a sterile, FDA-branded drug to create the compounded substance. This method, sanctioned under Section 503A, is favored by large drug companies producing FDA-branded products, likely because doing so requires the compounder to purchase their branded product, boosting their sales, rather than decreasing them.


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IV. ARGUMENT

A. Athenex is Entitled to Intervene as of Right.

Under Rule 24(a), a person is entitled to intervene “as of right” based on its showing of

four factors: “(1) the timeliness of the motion; (2) whether the applicant ‘claims an interest

relating to the property or transaction which is the subject of the action’; (3) whether ‘the

applicant is so situated that the disposition of the action may as a practical matter impair or

impede the applicant's ability to protect that interest’; and (4) whether ‘the applicant's interest is

adequately represented by existing parties.’” Mova Pharm. Corp. v. Shalala, 140 F.3d 1060,

1074 (D.C. Cir. 1998) (quoting Fed. R. Civ. P. 24(a)) (citations omitted).15 In this Circuit, a

party seeking intervention as of right must also demonstrate Article III standing. Fund For

Animals, Inc. v. Norton, 322 F.3d 728, 731-32 (D.C. Cir. 2003) (“[B]ecause a Rule 24 intervenor

seeks to participate on an equal footing with the original parties to the suit, he must satisfy the

standing requirements imposed on those parties.”) (internal quotations omitted).

As demonstrated below, Athenex meets the requirements to intervene “as of right”

because it (1) has standing as a defendant; (2) its motion is timely (the case has been stayed since

January 2018 and no dispositive motions have been filed); (3) its manufacture and sale of

compounded vasopressin is a significant protectable interest relating to the subject matter of this

litigation; (4) disposition of this action will impair or impede Athenex’s interest in the

15 Rule 24(a)(2) states in relevant part:

Upon timely application anyone shall be permitted to intervene in an action ... when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.

Fed. R. Civ. P. 24(a)(2).


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manufacture and sale of compounded vasopressin; and (5) Athenex’s interests are inadequately

represented by the parties (Athenex and Plaintiff are directly adverse on the matter and the FDA

cannot raise all of the same arguments available to Athenex).

1. Athenex Has Article III Standing to Intervene as a Defendant.

Athenex has standing to intervene as a defendant seeking to uphold the 2017 Guidance on

which it relies for its operations and sales of its compounded vasopressin products. When a

party seeks to intervene as a defendant seeking to uphold government action, it needs to establish

injury in fact caused by Plaintiff’s requested relief, causation, and redressability. Fund For

Animals, Inc., 322 F.3d at 732-33 (intervening defendant showed injury-in-fact, causation, and

redressability when the challenged government regulation threatened revenue and funding, that

injury was “fairly traceable to the regulatory action,” and a decision favorable to the government

would prevent that loss from occurring); Am. Horse Protection Assoc., Inc. v. Veneman, 200

F.R.D. 153, 156-59 (D.D.C. 2001) (group of show horse trainers authorized to intervene as a

right to defend the USDA’s enforcement regime, when an animal protection group sued over the

USDA’s lax enforcement of a rule related to the method of training show horses).

Athenex meets the standing requirement for intervention as a defendant because Athenex

would be injured in fact if the Court were to grant Plaintiff’s requested relief, of either or both

removing vasopressin from the 503B Category 1 List or vacating the 2017 Guidance. Mase

Decl. ¶ 21. Denial of such relief would prevent harm to Athenex. Fund For Animals, 322 F.3d

at 733; Am. Horse Protection Assoc., 200 F.R.D. at 156-57. Plaintiff filed this lawsuit to vacate

the FDA Guidance and remove vasopressin from the 503B Bulks List. As set forth above in Part

III.B. supra, Athenex has expended considerable research effort and financial resources in

reliance on the 2017 Guidance to develop its compounding business. Mase Decl. ¶¶ 8-9. If

Plaintiff prevails, Athenex faces immediate concrete injury in the form of the loss of research


18

and financial resources invested into its 503B operation, the loss of jobs (current and planned)

dedicated to 503B compounded, and lost profits from being forced to cease selling its

vasopressin products. Mase Decl. ¶ 21. Each of these harms is sufficient to show injury-in-fact.

See Fund For Animals, 322 F.3d at 732-33 (intervenor’s threatened loss of tourist dollars and

reduction in funding for a conservation program established injury-in-fact).

Conversely, should Plaintiff’s requested relief be denied,16 Athenex would continue to

produce and sell compounded vasopressin products and continue its 503B operation. This is

precisely the injury-in-fact, causation, and redressability required to show Article III standing

under D.C. Circuit precedent. Id.

Athenex’s “standing to intervene is not diminished” simply “because it seeks to defend,

rather than challenge, the [FDA] rule.” See, e.g., Assoc. Dog Clubs of N.Y. State v. Vilsack, 44 F.

Supp. 3d 1, 5 (D.D.C. 2014) (rejecting plaintiff’s argument to the contrary) (quoting D.C. Circuit

cases). Indeed, “a number of decisions in this Circuit have permitted intervention by parties

seeking to defend government action.” Id. (intervening-defendant had standing to defend USDA

16 Par’s Complaint is meritless and should be dismissed on at least two grounds as set forth in Athenex’s proposed Answer, attached hereto, as Exhibit A. First, the 2017 Guidance is not “final agency action” and thus, not reviewable under the Administrative Procedure Act (“APA”) 5 U.S.C. § 704. The 2017 Guidance does “not establish legally enforceable standards.” It is only the FDA’s “current thinking,” is “interim,” and constitutes only “recommendations.” 2017 Guidance at 1. The 2017 Guidance fails the two part test of “final agency action” set forth by the U.S. Supreme Court in Bennet v. Spear, 520 U.S. 154, 177-78 (1987) (“consummation of the agency’s decision-making process” and a decision by which “rights or obligations have been determined” or from which “legal consequences have been determined”). Second, the 2017 Guidance is also unreviewable under the APA because it is agency action “committed to agency discretion by law.” 5 U.S.C. § 701 (a)(2). The 2017 Guidance is an exercise of the FDA’s enforcement discretion and accordingly, is presumed immune from judicial review. Heckler v. Cheney, 470 U.S. 821,832 (1985) (ruling that FDA decision not to bring proceedings and not enforce FDCA against the state conducting lethal injections with FDA unapproved drugs for that purpose in death penalty cases was “committed to agency discretion” because the FDCA “gives [] no indication” of when the FDA should bring an enforcement action; therefore, FDA’s decision to not enforce was not reviewable under the APA).


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rule that would impose injury if invalidated). See, e.g., Fund for Animals, 322 F.3d at 733-34

(D.C. Cir. 2003) (intervening-defendant had standing to defend U.S. Department of Interior rule

that would impose injury if invalidated); Military Toxics Project v. EPA, 146 F.3d 948, 954

(D.C. Cir. 1998) (same, regarding defense of U.S. Environmental Protection Agency rule);

Wildearth Guardians v. Salazar, 272 F.R.D. 4, 13-18 (D.D.C. 2010) (same, regarding defense of

action by the U.S. Department of Interior and U.S. Fish and Wildlife Service).

Moreover, Plaintiff itself recognizes that Athenex has a stake in this proceeding by

impliedly referencing Athenex in its Complaint. Compl. ¶ 67. After alleging that the 2017

Guidance it challenges illegally permits another compounder, QuVa Pharma, Inc., to launch a

compounded version of vasopressin, Compl. ¶¶ 57-66, Plaintiff further alleges that “at least one

other compounder, is also working to prepare a bulk compounded vasopressin drug for launch”

and cited the July 28, 2017 vasopressin nomination letter from Baker Hostetler. Compl. ¶ 67.

This “other compounder” is Athenex and the relief Plaintiff seeks will injure Athenex, barring it

from compounding its vasopressin products. Mase Decl. ¶¶ 14, 21. Under these circumstances,

Athenex meets the requisite standing requirement to intervene as a defendant in this action.

2. Athenex Has a Significant Protectable Interest in Upholding the FDA Guidance and Vasopressin’s Inclusion on the Category 1 List.

The first factor of Rule 24 (a)’s four-part test is that the putative intervenor have “an

interest relating to the property or transaction which is the subject of the action.” See, e.g.,

Fund For Animals, Inc., 322 F.3d at 735 (citing Fed. R. Civ. P. 24(a)). “The test operates in

large part as a ‘practical guide,’ with the aim of disposing of disputes with as many concerned

parties as may be compatible with efficiency and due process.” Wildearth Guardians v.

Salazar, 272 F.R.D. 4, 12–13 (D.D.C. 2010) (citing U.S. v. Morten, No. 09-1018, 2010 WL

3069060, at *5 (D.D.C. Aug. 4, 2010)).


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Just as Athenex has Article III standing to defend the FDA Guidance and the Category 1

listing of vasopressin, see supra, Part IV.A.1, it also has an important interest in the

“transactions,” which here, are the FDA interim actions that are the subject of this litigation,

because if Plaintiff obtains its requested relief, Athenex will be forced to cease its marketing

and sale of its vasopressin products, Mase Decl. ¶ 21. See Fund For Animals, 322 F.3d at 735

(“The second factor is also readily dispatched. Our conclusion that the [intervenor] has

constitutional standing is alone sufficient to establish that [it] has ‘an interest relating to the

property or transaction which is the subject of the action’”); Assoc. Dog Clubs, 44 F. Supp. 3d

at 6 (litigant who had standing to intervene also had a protectable interest in the suit, under

FRCP 24(a) because “in this Circuit, satisfying constitutional standing requirements

demonstrates the existence of a legally protected interest”) (internal quotations omitted);

Wildearth Guardians, 272 F.R.D. at 13 (“In most instances, the standing inquiry will fold into

the underlying inquiry under Rule 24(a): generally speaking, when a putative intervenor has a

‘legally protected’ interest under Rule 24(a), it will also meet constitutional standing

requirements, and vice versa.”) (citing Roeder v. Islamic Republic of Iran, 333 F.3d 228, 233

(D.C. Cir. 2003)).

Furthermore, it was Athenex, through its counsel Baker & Hostetler LLP, who nominated

vasopressin for inclusion on the list of bulk drug substances that can be used for compounding

under section 503B of the FDCA. Mase Decl. ¶ 14. As a result of its nomination, FDA listed

vasopressin as a “503B Category 1” substance for purposes of the “Guidance.” Id.; see also

Compl. ¶ 67. Athenex has begun producing and selling its compounded vasopressin products in

reliance on vasopressin’s status as a Category 1 compounding substance under the Guidance.

Mase Decl. ¶ 18, 20. Athenex has spent considerable time and resources developing ready-to-


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use vasopressin products. See Part III.B., supra. Additionally, vasopressin is one of Athenex’s

inaugural bulk compounded products made under Section 503B, Mase Decl. ¶ 20, and part of

Athenex’s efforts to build its reputation for high quality and safe compounded products, which is

a top priority for Athenex, Keem Decl. ¶ 4; Mase Decl. ¶ 21. It is crucial that Athenex continue

the production and sale of vasopressin, so that Athenex may avoid the possibility of losing the

goodwill and positive brand-reputation that it is continuing to build with its growing customer

base. Mase Decl. ¶ 21. The alternative would be devastating to Athenex’s 503B operation. Id.

There is a need for Athenex’s vasopressin products because the ready-to-use form is safer

and has a longer shelf life than the branded vasopressin products Plaintiff sells. See Part III.C.,

supra. It is also less expensive than Plaintiff’s drug, which has dramatically increased in price,

by 3141% (from $4.27 to $138.40 per vial), in the roughly two years that Plaintiff has enjoyed

exclusivity. See JAMA at 2181. Many healthcare providers recognize the clinical importance of

Ahenex’s ready-to-use form, see Part III.C., supra, and the Institute for Safe Medical Practices

agrees that to “the maximum extent possible,” a commercially prepared (or compounded)

“premixed” product should be used, “versus manually compounded sterile products,” see

McCabe Decl, Ex. 5, ISMP Report at 8, 16. Athenex worked to develop a product that would

satisfy this market need, Mase Decl. ¶¶ 14, 19, and thus, it holds a significant interest in keeping

its product on the market. Because the relevant “property” under Rule 24 intervention is

Athenex’s compounded vasopressin products, which it produces and sells in reliance on the 2017

Guidance, Mase Decl. ¶¶ 18-20, and the relevant Rule 24 “transaction” is the 2017 Guidance and

FDA’s corresponding list naming vasopressin as Category 1—which Plaintiff seeks to

invalidate—“there can be no question that [Athenex] has the requisite interest.” See Fund For

Animals, 322 F.3d at 735; Mova Pharm. Corp., 140 F.3d at 1074.


22

3. The Disposition of this Action May Impair or Impede Athenex’s Ability to Protect its Interest.

Athenex easily meets the second factor of Rule 24(a): Plaintiff’s lawsuit threatens to

impair Athenex’s interest in the action. Under this prong, “[t]he inquiry is not a rigid one:

consistent with the Rule's reference to dispositions that may “as a practical matter” impair the

putative intervenor's interest, Fed. R. Civ. P. 24(a)(2), courts look to the “practical

consequences” of denying intervention.” Wildearth Guardians v. Salazar, 272 F.R.D. 4, 13

(D.D.C. 2010) (citing Fund for Animals, Inc. v. Norton, 322 F.3d 728, 735 (D.C. Cir. 2003)).

Simply put, if granted, Plaintiff’s relief sought would force Athenex to stop selling its

compounded vasopressin products. Mase Decl. ¶ 21. Thus, Athenex “is so situated that the

disposition of the action may as a practical matter impair or impede” Athenex’s “ability to

protect its interest.” Mova Pharm. Corp., 140 F.3d at 1074.

The second factor is satisfied because the 2017 Guidance at issue benefits Athenex and

vacating it and striking vasopressin from the Category 1 List—as Plaintiff asks the Court to do—

would remove that benefit. See, e.g., Assoc. Dog Clubs of New York State v. Vilsack, 44 F. Supp.

3d 1, 6 (D.D.C. 2014) (concluding this factor was met because the intervenor would be harmed if

Plaintiff prevailed and further observing that “[t]his potential harm is not obviated by the

[intervenor’s] ability to ‘reverse an unfavorable ruling by bringing a separate lawsuit,’ given the

cost and delay of doing so”) (citing Fund for Animals, 322 F.3d at 735); accord Am. Horse Prot.

Ass'n, 200 F.R.D. at 158–59.

Furthermore, if Plaintiff were granted the relief it seeks, to remove vasopressin from

inclusion as a Category 1 compound for purposes of the 2017 Guidance, that precedent may

make it more difficult for Athenex to succeed in a future suit against FDA if the agency does not

ultimately include vasopressin in its published list of bulk drug substances. Intervention is


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warranted where the litigation “could establish unfavorable precedent that would make it more

difficult for [the intervenor] to succeed” in any future suit to enforce his rights. Roane v.

Leonhart, 741 F.3d 147, 151 (D.C. Cir. 2014).

4. Athenex’s Interests Are Not Adequately Represented by the Existing Parties.

Athenex also satisfies Rule 24(a) because no existing party represents its interests. Fund

for Animals, 322 F.3d at 735. “This requirement is ‘not onerous’” and the “movant need only

show that the current representation may be inadequate.” Assoc. Dog Clubs, 44 F. Supp. 3d at 6–

7 (quoting Fund for Animals, 322 F.3d at 735) (emphasis added). The “putative intervenor’s

burden here is de minimis.” Wildearth Guardians, 272 F.R.D. 4, 13 (D.D.C. 2010) (citing Fund

for Animals, 322 F.3d at 735). Courts in the D.C. Circuit often conclude that “governmental

entities do not adequately represent the interests of aspiring intervenors,” Fund for Animals, 322

F.3d at 736, and “that private companies can intervene on the side of the government, even if

some of their interests converge,” Hardin v. Jackson, 600 F. Supp. 2d 13, 16 (D.D.C. 2009).

Neither of the existing parties represent Athenex’s interests. Plaintiff’s interests are

directly opposed to those of Athenex because Plaintiff seeks to invalidate the 2017 Guidance on

which Athenex relies to sell its compounded vasopressin products and seeks to strike vasopressin

from the 503B Category 1 list. The Federal Defendants do not adequately represent the interests

of Athenex in this litigation because those Defendants are regulators, not private parties engaged

in the regulated conduct at issue in this lawsuit and they are not charged with protecting

Athenex’s private interests. See Fund for Animals, 322 F.3d at 736 (“[W]e have often concluded

that governmental entities do not adequately represent the interests of aspiring intervenors.”);

accord Wildearth Guardians, 272 F.R.D. at 13. The Federal Defendants do not have any

commercial stake at issue, like Athenex has in the inclusion of vasopressin as a Category 1


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compounding substance for purposes of the Guidance, see Part III.B, supra (demonstrating that

Athenex has invested considerable resources). See, e.g., Hardin, 600 F. Supp. 2d at 16 (“The

D.C. Circuit has frequently found ‘inadequacy of governmental representation’ when the

government has no financial stake in the outcome of the suit.”). And, just because the FDA may

argue broadly that the FDA Guidance is lawful and should be upheld, this does not mean the

FDA has the same narrow and private interests as Athenex. See Am. Horse Prot. Ass'n, 200

F.R.D. at 159 (concluding that government’s representation was not adequate, reasoning that

“merely because parties share a general interest in the legality of a program or regulation does

not mean their particular interests coincide so that representation by the agency alone is

justified”).

Furthermore, Athenex will bring to the matter a detailed understanding of compounding

vasopressin from bulk in a commercial facility, which the other parties lack. As a bulk

compounder with a cGMP-compliant manufacturing process, state-of-the-art facilities, and

extensive experience manufacturing drugs from bulk substances, see Mase Decl. ¶¶ 8-9; Keem

Decl. ¶¶ 3-5, 8, Athenex is uniquely positioned to rebut Plaintiff’s inaccurate allegations

regarding two important issues.

Plaintiff alleges that: (1) all bulk compounding is dangerously unsafe (see, e.g., Compl. ¶¶

1, 9, 51); and (2) there is no clinical need for a bulk compounded form of vasopressin (id. ¶10).

Neither is true. And although the Court can grant this motion without deciding the merits of

these issues, they are central to Plaintiff’s lawsuit. The issues bear on the public’s interest in

leaving undisturbed the 2017 Guidance and on the hardship to Athenex and other bulk

compounders if Plaintiff’s requested relief were granted—two factors for the Court to consider in

Plaintiff’s request for injunctive relief. Athenex should be permitted to intervene to present


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counter-arguments to Plaintiff’s position, which the Federal Defendants are not equipped to do.

Athenex epitomizes safe bulk compounding and is well-poised to rebut Plaintiff’s allegations to

the contrary by showing the cGMP manufacturing standard required of bulk compounders is the

same standard applied to FDA-branded drugs; in other words, there is no meaningful difference

between the manufacturing process used by Plaintiff and that used by Athenex. See Parts III.A,

D, E, supra. Athenex is also uniquely positioned to establish a clinical need for vasopressin,

contrary to Plaintiff’s assertion that none exists. The ready-to-use vasopressin products that

Athenex manufactures are faster and safer because they do not need to be further diluted like

Vasostrict® or mixed on the spot, outside of a sterile environment, like Vasostrict® sometimes

is. See Mase Decl. ¶ 12-13, 16. Athenex’s products provide important clinical benefits and fill

an unmet need—points that neither existing party is able to argue.

5. Athenex’s Motion is Timely.

Finally, Athenex’s motion is timely because no party would be disadvantaged by its

intervention. This case has been stayed since January 25, 2018, see ECF Nos. 16-18, and no

party has filed a merits brief. Because participation will not slow the resolution of this matter or

otherwise prejudice the existing parties, Athenex’s application meets this Circuit’s requirements

for timeliness. See, e.g., Roane v. Leonhart, 741 F.3d 147, 151 (D.C. Cir. 2014) (“[T]he

requirement of timeliness is aimed primarily at preventing potential intervenors from unduly

disrupting litigation, to the unfair detriment of the existing parties.”). This action was filed on

October 26, 2017. ECF No. 1. But, in assessing timeliness, “the time elapsed since the inception

of the suit” is “not in itself the determinative test.” Roane, 741 F.3d at 151-152 (concluding a

district court abused its discretion when it found an intervention motion untimely because the

litigant “could have intervened earlier” the litigant “should have intervened earlier”; “relevant


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caselaw says [that] the most important consideration [is]: the fact that granting [litigant]

intervention was highly unlikely to disadvantage the existing parties”) (emphasis in original).

Athenex’s intervention at this early stage would not delay justice for the parties because

the parties have voluntarily stayed the case (see ECF Nos. 13, 17 (joint motions to stay the case))

and nothing substantive has happened since the Federal Defendants filed their answer on January

5, 2018, see ECF No. 11. No discovery has occurred (and it may not, if this case is based

entirely on the administrative record), no dispositive motions have been filed, and the case has

not advanced whatsoever, since January 2018, when the parties agreed to stay the case. Under

these circumstances, intervention is timely. See, e.g., Roane, 741 F.3d at 151; Hardin v.

Jackson, 600 F. Supp. 2d 13, 16 (D.D.C. 2009) (intervention motion was timely when case had

been stayed for two years, even though plaintiff’s motion for summary judgment had been filed,

when the court had not issued any decisions on the merits of plaintiff’s claim and “no discovery

has or will occur in this case” because it was based on the administrative record).

B. Athenex May Intervene Permissively.

In the alternative, if the Court should conclude that Athenex may not intervene as of right,

the Court should nevertheless permit Athenex to intervene permissively, under Rule 24(b) of the

Federal Rules of Civil Procedure. A party may intervene permissively if has a claim or defense

predicated on a question of law or fact common to the main action. See Fed. R. Civ. P. 24(b).

Here, Athenex has invested significant time and resources into its 503B compounding

operations—and its manufacture and sale of compounded vasopressin—in reliance on the 2017

Guidance. See Mase Decl. ¶¶ 8-9, 18-20. Because Plaintiff’s lawsuit would invalidate the 2017

Guidance, and jeopardize Athenex’s sale of vasopressin, see Mase Decl. ¶ 21, Athenex may

permissively intervene to present defenses to Plaintiff’s action. These defenses are set forth in

the accompanying Proposed Answer, Exhibit A, and will be based on Athenex’s status as a


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registered 503B facility and its unique perspective on the 2017 Guidance and why it must be

upheld. These are facts and questions of law common to Plaintiff’s action and thus, Athenex

meets the standard for permissive intervention. See, e.g., Fed. R. Civ. P. 24(b).

V. CONCLUSION

For the foregoing reasons, Athenex Pharma Solutions, LLC and Athenex Pharmaceutical

Division, LLC respectfully request that the Court grant their motion to intervene as defendants

in the above-captioned case.


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Dated: August 13, 2018 Respectfully submitted,

/s/ Gilbert S. Keteltas Gilbert S. Keteltas

D.C. Bar No. 421236 Christopher H. Marraro D.C. Bar No. 395152 Thomas E. Hogan D.C. Bar No. 492003 Baker & Hostetler LLP Washington Square, Suite 1100 1050 Connecticut Avenue, NW Washington, DC 20036-5304 Telephone: (202) 861-1500 Facsimile: (202) 861-1783 [email protected] [email protected] [email protected] Bridget S. McCabe D.C. Bar No. 1002889 N.Y. Bar No. 5438528 Baker & Hostetler LLP 45 Rockefeller Plaza New York, NY 10111-0100 Telephone: (212) 589-4200 Facsimile: (212) 589-4201 [email protected] Attorneys for Proposed Intervenor-Defendants Athenex Pharma Solutions, LLC and Athenex Pharmaceutical Division, LLC


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CERTIFICATE OF SERVICE

I HERBY CERTIFY that on this 13th day of August, 2018, a true and exact copy of the

Memorandum of Athenex Pharma Solutions, LLC and Athenex Pharmaceutical Division, LLC in

Support of Their Motion to Intervene was served via operation of the ECF system on all counsel

of record pursuant to Local Civil Rule 5.4(d).

/s/ Gilbert S. Keteltas

Gilbert S. Keteltas


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